Why Silver Investment Outperforms Other Financial Strategies
Silver dollar value holds real worth, which paper currencies and other investments do not. Investors like Mike Maloney have bet their own fortunes on the continued success of precious metals investing, metals, which backed all U.S. currency until Nixon, removed the legal ties between gold and the monetary supply. Economic conditions force changes in monetary policies, which mean that governments print money and borrow through bond initiatives to cover the costs.
Money represents the total value of labor, property, goods, and services. These concrete goods have measurable values, and printing more or less money does not increase the basic values of industrial output and assets. Money’s value becomes greater or smaller due to deflation or inflation.
Why should an investor hang on to his or her silver investment in the current market?
Silver investment has intrinsic value, and the metal gets used up in industrial processes, cutting world supplies, unlike gold that remains at stable reserve levels. Smaller world reserves of gold make the metal more precious, which allows investors to buy silver investment opportunities for fewer real dollars. Silver gets used up by industrial processes, and eventually silver reserves will grow smaller than gold, making values skyrocket. Demand and prices could get to the point where people could no longer find silver investment, so holding on to any silver investment makes sound long-term financial strategy for any investor.
Should an investor buy a larger silver investment in the current market?
The current silver dollar value of $21.44 per ounce on November 10, 2013, offers investors an affordable commodity, priced very low. Precious metals values fluctuate with economic conditions, but they have consistently outperformed other investments when held for many years. Silver dollar value continues to appreciate due to the underlying silver investment and numismatic values. Current prices remain low enough that investors can buy larger percentages of silver reserves than many other investment opportunities. Owning a larger percentage of any commodity corresponds to true wealth. Remember that inflation and deflation always adjust to correspond to true wealth. Owning a larger percentage of a finite commodity makes sound investment strategy, but owning a silver investment that will become more uncommon due to industrial usage creates extraordinary opportunities to build real, lasting wealth.
Why do investors need to understand basic economic forces?
The percentage of gross national product represents true wealth or buying power. For example, people can find hundred-trillion dollar bills worth less than toilet paper or single coins that could buy cars, depending on inflation and currency values. Mike Maloney discusses economic systems, showing why historical changes have contributed to today’s volatile precious metals market. The founder of GoldSilver.com, Maloney has become one of the foremost experts on economic cycles and silver investment, explaining complex systems in simple terms that average investors can understand. These economic forces have caused the prices of metals to skyrocket and economies around the world to tank. No matter how much money governments print, the real value of goods, services and property remains the same. Investors need to know how much their money and investments are worth in real terms to understand whether their investments actually represent increases in buying power.
What is supply-side economics, and why does the approach favor silver investment?
Supply-side economics describes the theory that production of goods underlies real wealth, and most economists accept the basic premise that increases in manufacturing increase standards of living, build real wealth, and stabilize governments. However, a more tightly focused definition advocates reducing taxes to stimulate investments. Unfortunately, when governments cut their own income streams, they borrow money by authorizing deficit spending. Printing more money only compounds the problem by borrowing against future prosperity to live better today. Currency becomes worth less, so real buying power drops. Precious metals prices have risen dramatically in the past decade due to two factors: governments printing more money and banks offering credit.
Why does silver outperform gold?
People who own silver own a commodity that becomes more precious because the world uses more silver than it mines. Silver dollar value reached a high of $50 an ounce in April of 2011 due to the inflationary pressures of governments printing more money to fight the global recession. Temporary drops in commodity prices usually follow rapid increases, so the slight drop in silver prices is normal. European debt crises should stimulate new rounds of wealth increases for silver investment advocates. Silver prices have self-corrected due to market demand, but they should take off again because of continued deficit spending, unemployment, and uncertainty in the investment markets. Gold has made similar corrections, but because of percentages, silver investment has outperformed gold and it will continue to do so. Silver has strong worldwide demand for other uses than making decorative jewelry and accessories.
What uses does silver have?
Silver mining fails to meet industrial demands and world reserves continue to dwindle. Analysts predict that supplies will fall short for the next decade, and statistics show there could already be more gold above ground than silver. Silver conducts electricity better than any other metal, and dissolving the metal in nitric acid produces pastes that form powders or flakes used in electronic devices for capacitors, circuit paths, photovoltaic cells, and other materials. Governments use the metal for coins more often than gold, and silver dollar value could make coins worth more than face values. Artists and photographers also use the metal for decorative purposes and film development.
What are valuation channels?
Price means nothing, but value means everything. Understanding real wealth means knowing how assets compare to real goods, services and property. All these statistics must be considered when trying to figure out whether an investment or commodity has real value. Total assets, gross national products, credit debts, property values, and liabilities must be considered to understand silver dollar value, the benefits of property ownership, or the worth of gold bullion.
Why do current economic policies base their principles on pipe dreams?
Governments do not print money, but they borrow it by selling promissory bonds. Banks also increase the money supply by offering credit. When people put money in banks, the banks only have to keep 10 percent on reserve, and they can loan the other 90 percent. The world’s money supply has no solid assets to back it, and economic collapse could easily occur if people suddenly demand their cash. Deficit spending has jumped to over 10 times gross national products, creating an unsustainable situation, and collapses and recessions become inevitable. The current European crisis could well light the fire that becomes a global conflagration, eating up life savings and paper currencies that economic forces have agreed to accept as real assets. Silver investment offers small and large investors ways to hedge their portfolios. The current price of slightly over $20 an ounce offers investors real bargains for bullion, silver dollar value rounds, and numismatic coins. Temporary price retrenchments should stop, and silver dollar value will rise in real terms.